The Impact of Service Trade on the Economic Growth of Ethiopia: The Case of Tourism
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Date
2011-06
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Addis Ababa University
Abstract
International tourism is a major foreign exchange earner and a principal export for many low
income countries as well as for developed countries. Now a day’s many developing countries
focus on economic policies for promoting international tourism as a potential source of
economic growth of the country. This paper has the objective to assess whether tourism has
really promoted growth based on the tourism-led growth hypothesis (TLGH) using annual data
covering the period 1981-2009 for Ethiopia. Diagnostic tests, namely Augmented Dickey-Fuller
(ADF) for unit root and Johanson and Juselius (JJ) for co integration test are used. The findings
of the study showed that there is a positive relationship between tourism and economic
growth. The results of this study suggest that government should focus on economic policies to
promote international tourism as a potential source of economic growth in Ethiopia.
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Economic Growth of Ethiopia